Mid-Morning Look: January 21, 2021

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Mid-Morning Look

Thursday, January 21, 2021






DJ Industrials




S&P 500








Russell 2000






Stocks adding to yesterday’s record gains, with the Nasdaq Composite pacing the advance (mega caps leading a second day – AAPL, AMZN, GOOGL) as risk appetite remains in play among retail investors as momentum names outperform, taking the lead from the reflation stocks and small caps which are seeing some modest weakness today. Newly sworn in President Biden is set to speak at 2:00 PM Est later today about the new administration’s response to COVID-19, while a bevy of executive orders are also expected to be announced. Economic data was mixed today with jobless claims remaining high (weak reading), while housing stocks jump following better monthly Housing Starts data (which is lifting the homebuilder sector). Retailers get a bounce following a few positive analyst comments, auto names extend gains following positive sell-side commentary as well. Investors continue to pile into stocks, ignoring the rich market valuations heading into peak earnings season next week (INTC and IBM report tonight in tech). Transports decline, led by weakness in airlines after posting a larger quarterly loss. Bitcoin prices down about 9% below $32,000 after Guggenheim Global CIO Scott Minerd said last night on CNBC he expects that Bitcoin will retrace back to $20,000. Stocks quietly adding to recent gains as path of least resistance remains sharply to the upside.


Economic Data

·     Weekly jobless claims fell to 900,000 in the latest week (vs. est. 910K) and compared to 926,000 prior week (revised from 965,000); continued claims fell to 5.054 mln (est. 5.40M) from 5.181M prior; the 4-week moving average rose to 848,000 Jan 16 week from 824,500 prior week; U.S. insured unemployment rate unchanged at 3.6% from 3.6%

·     Philadelphia Fed business conditions index for January at 26.5 (consensus 12.0) vs 9.1 in December; Fed new orders index 30.0 in January vs 1.9 in December

·     Housing starts for December rose +5.8% MoM to 1.669M vs. 1.558M expected and 1.578M prior (revised from 1.547M); Building permits rose +4.5% to 1.709M vs. 1.610M expected and 1.635M; December single-family starts +12.0 pct to 1.338M unit rate; multifamily -13.6% to 331,000 rate







WTI Crude















10-Year Note





Sector Movers Today

·     Retailers; AEO shares dipped after saying Q4 revenue is expected to decrease in the low single digits due to store revenue declines from weak mall traffic, store closures and reduced hours related to the pandemic; in research, Deutsche Bank upgraded CPRI to Buy from Hold (tgt to $56 from $28), VFC to Buy (tgt to $103 from $81), DDS upgraded to Hold from Sell (tgt to $60 from $31) and UAA upgraded to Buy from Hold (tgt to $22 from $15); DECK tgt raised to $400 from $388 at UBS as forecast DECK delivering a Q3 beat and see better than expected sales and gross margin driving the EPS beat; NLS named favorite small cap growth idea for 2021 at Truist saying online/retail checks suggest that robust demand for product carried throughout the holidays

·     Bank movers; KEY Q4 EPS $0.57 vs $0.43, revs better $1.85 bln vs $1.71 bln and also announces a $900 mln share repurchase program (provision for credit losses was $20M vs. $109M YoY); SBNY Q4 EPS $3.26 vs $2.89 and net Interest Income $395 mln vs $402.9 mln est.; MTB Q4 EPS $3.54 vs $3.01, Net Interest Income $989.3 mln vs $93 mln, net charge offs came in better; trust bank NTRS Q4 EPS miss at $1.12 vs. est. $1.49 as AUM rises 14% YoY to $1.41 trillion; BKU Q4 EPS $0.89 vs $0.71, BANC Q4 EPS beat est., $0.35 vs $0.18, TFC Q4 EPS better, $1.18 vs $0.95, FBC Q4 EPS better, $2.83 vs $2.36; FITB Q4 EPS 78c vs 69c est. and NIM 2.58% vs. 3.27% a year ago, net credit recoveries $118 million, +4.4% y/y, estimate charge-off $134.9 million

·     Utilities & Solar; Guggenheim named CNP as their Best Idea, upgraded AEP, SR to Buy, downgraded HE to Sell and ALE to Neutral, and list EXC, FE, NEW, SO as their current Neutral-rated utilities with potential upside, DUK, ETR, NI, SRE as Buy-rated value plays, and D, NEE as bellwether buys and absolute calls; Wells believes that YE20 updates will highlight strong underlying fundamentals for the sector, expect updates from companies pursuing simplification strategies (most notably EXC), and they reiterate ES at OW and raise their target to $100 as shares remain compelling; Morgan Stanley initiated SEDG as a new OW with a $354 pt as its status as the world leader in the solar PV inverter market will allow the company to continue to gain market share in a fast growing space and penetrate other markets; in alternative energy, FCEL shares fell after reporting Q4 EPS loss (8c) wider than the expected (4c) loss on revenue $17.0M, +54% YoY but narrowly missing est. $17.1M, and shares of PLUG also fell in sympathy

·     Aerospace & Defense; Aerospace & Defense: Credit Suisse with several changes: HWM PT raised to $34 from $25, SPCE PT raised to $36 from $26, MAXR PT raised to $49 from $28, RTX PT raised to $81 from $70 and rating change as upgrade SPR to outperform as become more constructive on the narrow body OE market, while downgraded shares of HXL (to underperform) and TGI (to neutral; MAXR downgraded to Neutral at JPMorgan while raised tgt to $55 from $30 after the rally the past three months (+85% vs the S&P 500 +10%) has boosted the shares to our most optimistic expectations for the turnaround story.



·     AMZN +2%; as mega cap tech and retailers among early leaders

·     DHI +3%; homebuilders outperform behind better economic housing starts data

·     FSLY +5%; upgraded to outperform at OpCo, grown incrementally positive after speaking to channel checks, which suggest record traffic volumes and a positive launch of compute@edge

·     FUBO +14%; was initiated outperform and $40 tgt at Barrington saying it offers a streamed multichannel video programming distributor option featuring a complete programming package and exceptionally intense sports focus

·     OSUR +12%; after saying its saliva collection device, Oragene Dx (OGD-610), has been included in industry’s first U.S. FDA authorization granted to a whole exome sequencing platform

·     TRV +3%; Q4 core eps $4.91 on revs $8.40B, vs estimates $3.18 on $7.27B, and earned premiums $7.48B topped est. $7.42B on last year’s $7.25B



·     AA -8%; shares decline despite a beat on the top and bottom line for Q4 as focus turns to Q1 as sees lower qtrly performance in aluminum segment and bauxite segment

·     AEO -3%; after saying Q4 revenue is expected to decrease in the low single digits due to store revenue declines from weak mall traffic, store closures and reduced hours due to Covid

·     DFS -3%; Q4 EPS $2.59 vs. est. $2.42 on in-line revs of $2.82B, quarterly provision for credit losses of $531M decreased $307M YoY, and Q4 net interest income decreased $47M (2%) YoY

·     FCEL -5%; as posted a Q4 EPS loss of (8c) greater than the est. loss (4c) and while revenue climbed 54% Y/Y to $17M, it was just below estimates (shares of PLUG dipped in reaction)

·     HYRE -11%; downgraded at Ladenburg citing valuation following the recent rally in the shares

·     UAL -5%; leads transports lower after posting a larger than expected quarterly loss and said it expects the coronavirus pandemic will continue to weigh on travel demand this year as the airline turns its focus to rebuilding itself



·     Athira Pharma (ATHA) 4M share Secondary priced at $22.50

·     CareDx (CDNA) 1.923M share Secondary priced at $91.00

·     Chimerix (CMRX) 11.765M share Secondary priced at $8.50

·     Cryoport (CYRX) 3.788M share Spot Secondary priced at $66.00

·     CytomX Therapeutics (CTMX) 14.286M share Secondary priced at $7.00

·     Dream Finders Homes (DFH) 9.6M share IPO priced at $13.00

·     Dyne Therapeutics (DYN) 6M share Secondary priced at $28.00

·     Editas Medicine (EDIT) 3.5M share Secondary priced at $66.00

·     Inovio (INO) 2.7M share Spot Secondary priced at $8.50

·     Mytheresa (MYTE) 15.647M share IPO priced at $26.00



Market commentary provided by Hammerstone Markets, Inc, a firm separate from and not affiliated with Regal Securities. Regal Securities has not participated in the creation of the content, and does not explicitly or implicitly endorse the content.

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